Monsoon in India, NBFCs in Focus, G20 Summit and more in today’s trade setup #Nifty

Market Trade set up 11th June

Markets cannot fall when it rains heavily in Mumbai and though these are not monsoon rains and though monsoon didnt keep its date of 8th June to set in Mumbai, we still had a much awaited rally of Nifty and now we are above 11900 mark. Now the major worry of Nifty breaking the 11800 mark and going below that might have come off a bit more.

Globally things still continue to look better with Dow positing 6th straight day of gains as Dow gained nearly 80 points, majorly on the news of Mexican tariffs being put off. This has rubbed off on Asian markets too and today also Asia is in green with Hong Kong up 200 points and Japan up 100 points. Brent crude is still around 62.4 dollars.

Coming to the domestics, the bad news seems to be taking a back seat with respect to NBFCs and the focus is slowly shifting to budget and the macro data like IIP and CPI inflation which are coming tomorrow. One global worry that might impact India again is Trump threat again where he said that he would tax Chinese goods more if Chinese President Xi Ping doesnt make it to G20 summit later in this month.

Our worry in the whole thing is the metal prices and exports which will be majorly hit if US and China are locked in a trade war. This is something markets will watch in next few days and we need to keep this in mind, while looking at where Nifty will go from here.

On the derivatives front, there was a lot of buying that happened yesterday in the futures market in the first half of the day and some selling was seen in the second half. This is evident from the Nifty futures premium which dropped from 32 points at the beginning of the day to just 11 points at the end of the day.

The overall long positions still continue to be around 59%. On the options front, 11900 put added 5.9 lakh open interest and that brings the OI at 11900 close to 11800 put which has the highest open interest. That means 11880 might come as a support for this week’s expiry. On the call side 12200 call added 2.8 lakh open interest but 12000 call has highest open interest and 11980-12020 will be a big hurdle to cross and if that is achieved then 12180 can be achieved.

What is the Nifty call for the day?

Yesterday, I spoke about exiting positions taken around 11900-11920 levels if Nifty crosses 11950 and you would have booked profits at 11950-11970 zone of Nifty early in the morning. The correction later to below 11900 mark would have allowed you to re-enter and you would be sitting on a mild profit.

Today, Nifty will open slightly positive around 11940-11970 zone very close to the resistance zone of 11980-12020 and we need to see if that zone will be broken or not. I suggest you to exit the longs as soon as we cross 11950 mark again and book profits. Nifty is moving closer to 12000 and all that we need to see is if Nifty has the power to break that 11980-12020 mark and close above that. Today is a wait and watch day.